Euro Trades Near Six-Week Low Before Italian Vote; Yen Falls

The euro traded 0.2 percent from the lowest in six weeks against the U.S. dollar before Italy’s parliamentary election starts this weekend.

The 17-nation currency headed for a third weekly loss ahead of the Feb. 24-25 voting, with opinion polls from earlier this month showing former premier Silvio Berlusconi closing a gap with front-runner Pier Luigi Bersani. The yen fell against most of its major peers amid speculation over who will take the reins at the Bank of Japan.

“The Italian election is weighing on the euro,” said Noriaki Murao, managing director of the marketing group at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “If it becomes a close race, it may result in a hung parliament, making it more difficult to push forward with reforms.”

The euro traded little changed at $1.3193 as of 9:16 a.m. in Tokyo from yesterday, when it touched $1.3161, the lowest since Jan. 10. The shared currency gained 0.2 percent to 123.08 yen, after dropping to 122.26 yesterday, the weakest since Jan. 29. For the week, the euro was set for a 1.3 percent decline versus the greenback and 1.5 percent drop against the yen. The Japanese currency slid 0.2 percent to 93.26 per dollar, still headed for a 0.3 percent gain this week.

(source: Bloomberg)